Budget 2022: Experts give 4 out of 5 to Nirmala Sitharaman's budget; see 65,000 on Sensex by December 2022

Union Finance Minister Nirmala Sitharaman delivered her fourth budget for this year, which got a thumbs up from the markets as well as the analyst community.

Most experts, which Zeebiz.com spoke to, gave a rating of 4 out of 5 to Budget 2022 (5 being the best). Indian markets also closed with gains of over 1 per cent on Budget Day but pared some gains towards the close of the day.

Almost 5 out of 6 analysts gave a rating of 4, while one expert gave a rating of 3.5 to Budget 2022.

The Budget was pro-growth and a visionary one that would help the economy to touch $5 trn by FY26. The Budget largely focused on the growth engines of the economy such as infrastructure, healthcare, rural development as well as education.

The FY23 fiscal deficit is targeted at 6.4% of GDP (in line with expectations) against 6.9% in FY22; however, the gross borrowing stands at an elevated Rs 14.95 trn for FY 22-23, considerably above market expectations.

The government proposes to hike the capital expenditure allocation to Rs. 7.5 trillion as against Rs. 5.54 trillion budgeted in FY2022 and Rs. 6 trillion as per revised estimates. A rise in CAPEX will help in boosting growth across sectors and generate employment opportunities.

“The Union Government delivered a pro-growth budget while attempting a modest fiscal consolidation. The Government’s focus was on promoting capital expenditure for triggering higher economic growth multiplier and crowding-in private capex,” Harshad Patil, Chief Investments Officer, Tata AIA Life Insurance, said.

“The Budget provides a sustained impetus for creating world-class integrated multi-modal transport and logistics infrastructure while focusing on inclusive development, facilitating energy transition as well as providing a roadmap for financing investments,” he said.

The equity markets have welcomed the growth-oriented budget as well as the outsized increase in capex provided for. Now Reserve Bank of India policy will be in focus, suggest experts.

“The budget is behind us and now 9th Februrary’22 become relevant. The commentary around RBI raising rates in its coming meeting would be that much more relevant,” Motilal Oswal, MD & CEO, Motilal Oswal Financial Services, said.

“Having said that, in my opinion, equity markets in India are likely to see 20000 on the nifty and about 65000 in the Sensex by December 2022 on the back of 15-20 per cent earnings growth in FY23,” he said.

Oswal further added that sectors like infrastructure, real estate, industrials, financials, Information technology, and  pharmaceuticals are likely to outperform while consumer staples and discretionary are likely to underperform”

We have collated views from different experts on how they rate Budget 2022 on a scale of 1 to 5:

Expert: Yesha Shah, Head - Equity Research, Samco Securities Ltd

We rate the current year's budget 4.5/5. The budget was definitely a booster to the previous year's budget. The government's remarkable effort to increase its commitment to capital investment will certainly operate as a stimulant for improving economic development, increasing credit growth, and catalysing private investment.

What is most welcome is that the budget was not a populist one, despite the elections driven temptations. With the government's solid intention laid down, on-the-ground implementation remains crucial and monitorable.

Expert: Ashis Sarangi, SEBI registered RIA, Pickright Technologies

We still give it a 4 rating because, while it has not reached retail investors' expectations, it has taken the essential steps to generate short-term growth and will encourage youngsters and entrepreneurs to explore the prospects in agritech and manufacturing.

Expert: Roop Bhootra, CEO, Investment Services, Anand Rathi Shares and Stock Brokers

Would rate the budget at 4 out of 5 so far looking at the speech. Talking about the broader numbers Capital Expenditure outlay raised by 35.4% to 7.5 lac crs 2.9% of GDP.

Effective Capex seen at 10.7 lac crs while reigning fiscal Deficit at 6.4% of GDP in FY23 bodes well for growth in the economy.

Expert: Sonam Srivastava, Founder, Wright Research

We would rate this budget a 3.5 as it was very much in line with market expectations and treaded the delicate balance between growth and fiscal prudence by pushing Capex investments.

This budget will go a long way in boosting growth if the infrastructure spending delivers but might also trigger inflation. There were no surprises - positive or negative, but the focus on digitization, upskilling, education, fintech, and inclusivity was a good call by the FM.

Expert: Anuj Jain, CA, Co-founder and Research Head of Green Portfolio Private Ltd

I will rate it as 4 because there’s always little room for improvement. But, I am very happy with the budget. The government gave another push to the economy, so I am quite optimistic with the announcements and their impact on the economy and markets for the next year.

The budget is inclined to the manufacturing industry. Also, to mention that it was bold not to make the populist announcements right before big elections coming.

Expert: Abhay Agarwal, Founder, and Fund Manager, Piper Serica

I would rate it at a solid 4+ for sticking to only providing policy guidance and a clear statement of intent. There is an extension of existing schemes rather than an announcement of new populist schemes.

The government has shown its intention of leaving the business to the private sector especially start-ups. The focus on creating a virtuous growth cycle for the next 25 years is really remarkable.

There were no negative surprises, instead, the FM focused on minor tweaks required to ensure that the private sector and investors are more confident about making long-term investments.

(Disclaimer: The views/suggestions/advice expressed here in this article are solely by investment experts. Zee Business suggests its readers to consult with their investment advisers before making any financial decision.)